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With pharma pricing in the spotlight, US scrutiny could lead to UK ramifications

Words by:
March 7, 2019

Pharma companies and their approach to pricing are back in the political spotlight. While there are major differences between US parties on most issues, the debate on drug pricing has united them as last week top executives from seven major pharmaceutical companies were called to testify in front of Congress. A combative session lasted several hours, with industry leaders laying out their position on why innovative treatments bring the price tag they do.

President Trump has set out a blueprint on medical pricing, a key aim of which is to base US drug prices on a basket of treatment prices in other developed countries. The response from pharma executives to Trump’s proposals was largely dismissive, but it has upped the pressure on pharma companies around their approach to pricing as well as increasing public scrutiny of their approach.

The ramifications for pharma companies may also now be felt here in the UK and the timing is important.

While the UK health system is markedly different to that in the US, there is mounting political awareness at home over drug pricing. And the longer the public debate goes on, the greater the willingness of politicians to take up a challenger role on the issue will be.

Today, the UK’s Health and Social Care Select Committee is gearing up for a showdown with US pharma company Vertex – as concerns escalate over the impasse between NHS England and the company on agreeing a deal for its cystic fibrosis drug Orkambi.

NHS England state they have ‘offered the best deal in its history’ to Vertex, but you can bet that it is significantly lower than the US offer, and Vertex will be seeing this in the broad global context.

Put the US’s scrutiny over globally unequal drug prices together with the UK’s bullish approach to cutting the medicines bill, add in a dose of post-Brexit trade negotiation and a heightened political atmosphere. Medicines pricing could stay in the spotlight for some time to come. And pharmaceutical companies will be on red alert, as all moves in this political chess match points towards a squeeze in prices for manufacturers.

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